DubMC queried several "world music" labels about the impact on world music of changes at Tower Records and other major CD retailers. Here is Part One of the responses. Make sure to read down to the hilarious response by Yale Evelev of Luaka Bop. The questions we asked them:
I hear Tower Records is filing for bankruptcy (again), Virgin fired all their local world music CD buyers, and Borders is once again reducing the size of their world music sections (and using the space for greeting cards). Is this all true? How is this impacting the world music market in particular? Is the CD dead yet? If not, how long do you give it?
Labels respond...
Dan Storper, Founder/CEO, Putumayo World Music:
Yes, it's true that most record stores are cutting back on the depth of catalog titles they stock including world music which also reduces sales. At the same time, we all recognize that there are just too many releases for record stores to stock and that choices are being made, not always based on actual knowledge of potential. No retail buyer buys CDs that they expect to sit on the shelf, but results are often so mixed, oftentimes stores expect to make most of their profit from co-op charges rather than sales.
Though the marketing is shrinking and the top world music CDs are soundscanning about 15% less than a year ago and probably 40% less than five years ago, I think the CD will remain the primary way consumers over the age of 30 listen to music for the next five to ten years. At the same time, the ease and speed of downloading and lack of availability of much world music, means that downloads are going to be more and more significant over the coming decade.
Eric Smith, Label Partner, Easy Star Records:
Tower’s troubles are a big blow for us. In the past they were a good source for steady sales and a place where we could run affordable retail programs. I always felt that their buyers understood the reggae market, and for a downtown New York label it was significant that they had the stand alone world music store on Lafayette Street. For our latest release last month, their order represented nearly 10% of our initial ship, but we had to pull the order due to their problems. Who knows if we will make up those lost sales somewhere else.
Gustavo Fernandez, founder/owner/president of DLN Distribution, Delanuca Records, and Ghordo Music:
Yes, Tower once again is filing but this will be the last time since you are able to file only twice and it most probably will be bought by Trans World Entertainment which in the past has pretty much bought every other bankruptcy music chain such as Wherehouse, Specs, The Wall, Camelot, Strawberries and most recently 200 of the 1000 Musicland / Sam Goody chain that closed earlier this year. Trans World is now at approximately 1,200 stores and basically the "Giant" of the industry. Virgin besides having fired some key folks has recently closed the Miami store as well as the Mockingbird store (Dallas) and is expected to close the Boston store as well. The New Orleans store since Katrina (though never affected and is intact) has yet to open. Though Borders was a great destination for World Music and good music per se it has definitely lost "its heart" as being in the forefront of music. Regarding Borders I did hear some gossip that in a year’s time Borders will be back full swing with music and partly I think it only makes sense since they have the locations but also the clientele and Hear Music (Starbucks) is making some interesting moves... How's the impact on World Music? In the traditional model it’s devastating to know that some of these stores will no longer be there. Though they might continue to exist as brands they will never regain the passion that say Tower Records had when each store had its own individual buyer of World Music. On the positive side the internet will definitely pick up and because of the internet I think less mainstream-minded artists will have a chance to compete with the traditional mainstream artists. But mind that they need to be aggressive within the media such as radio, press, internet sites, links that also attract that same consumer. As consumers will no longer have a traditional Tower or Virgin to go to, they don't stop purchasing. World Music has the advantage of heading into the Lifestyle stores. Whether it be putting your music with Wild Oats (nationally), Base in Miami Beach, or key "dedicated" music stores like Amoeba in California or Waterloo in Austin, TX, there's still a market. I think the CD will continue to survive in its physical form. What we need to look at are new avenues besides the traditional "internet" model. Break the concept that music only sells within a music retailer. Though Putumayo is a compilation-only label, it has done a respectable job of positioning its product outside of the box. Finally what needs to happen more than ever is to tour tour tour....and obviously make GREAT music. I foresee this in the long run as a positive change that will help artists and those in support of the artists.
Harold Hagopian, Owner/Founder, Traditional Crossroads:
The CD is not dead. I estimate five to ten years before downloads become the main format for consumers. I doubt that Tower is dead either, but some serious reorganization will most likely keep it viable for some time. I predict they will downsize to 50 or less flagship stores for now and in the future they will become more of a cafe/download facility. Most of the large chains have started buying product through a central office and made local "world music buyers" section managers. I'm not surprised by Virgin doing the same. It is true that retailers have downsized world music sections, which makes it harder to reach the general music buying public. Serious world music fans though hear about new releases through radio or world music magazines and find a way to buy them.
Ian Ashbridge, Joint Owner, Wrasse Records, UK:
There is a real issue developing in that CD sales are decreasing and the legal download market is not covering the shortfall, primarily due to illegal copying and downloading. This leaves retail exposed as their stock-to-sales ratio increases. As a result, they will cut their inventory. They will not cut chart or rock music at this point, and as a result that is why they cut niche sections first. However, I don’t believe this is the right strategy as it is the over 40 year olds who mainly buy World Music, who will be one of the last groups to abandon the CD in favour of downloads. As a result the market will shift away from traditional retail as they reduce their range to online stores. The market is changing quickly. It is up to those who make and market the music to keep providing what the customer wants and to be intelligent about how that is packaged.
Jacob Edgar, CEO, Cumbancha, and A&R consultant for Putumayo World Music:
The times are definitely a'changing at record retail. Stores aren't selling as much as they used to, there are fewer hits and as a consequence they are becoming more conservative, taking fewer risks to expose new artists. I don't blame it all on downloads, though. The fact is, there is too much substandard stuff being released and consumers can't keep up. Hell, I can't even keep up, and part of my job is listening to music! Since world music is a niche genre it is definitely being impacted by the current situation. Stores are buying less, reducing their world music sections and sticking to the tried and true.
However, the CD is not dead, and I don't believe it will ever truly die. People still want CDs, as sales of large quantities of CDs at the recent Ska Cubano shows demonstrate. Amazon has sold a huge amount of Ska Cubano CDs, evidence not only that people want their CD, but also that they can't find it at their local retailer. Indeed, the record store is not the main place to buy music any more as the internet and alternative retail outlets like Starbucks, gift shops, book stores, etc have demonstrated that people will still buy good music if they are exposed to it and the act of purchasing it doesn't require a huge effort. Indeed, I think "effort" is the operative word here. People don't want to have to work too hard to access the music they want to hear. The internet is easy, but it still requires more work and time than grabbing a CD from a display while you're waiting for your latte or buying your organics at Whole Foods.
Mel Puljic, Label Manager, Wrasse Records, USA:
It’s true that there's been some upheaval in some of the big accounts. Tower's difficulties are having the most impact because of the nature of the music we sell and market, and especially where our artists tour. Only a select few world music artists / titles do huge sales at Borders, and Virgin doesn’t have stores (or not many) in all of our big markets. But Tower does have a lot of stores in key markets and they sell a wider range of titles in good numbers of world music product. Tower is very important to us on the West Coast, especially because it takes in many viable markets. It'll hurt a lot if Tower goes out of business, but at this juncture it doesn’t appear that it will.
Patrick Moxey, President, Escondida Records:
Tower is still ordering and racking world music product, but they are not particularly world music friendly. The biggest loss is, as you mention, Virgin which was extremely proactive in world music. The CD is not dead yet, but as downloading increases, the return rates are going up, makings CDs a tougher business.
Rob Simonds, “The only one here left,” NorthSide:
Not dead yet, but it's truly fading fast. Certainly within five years
downloads will overtake CDs as the primary method of music consumption.
"Traditional record retail" as we know it will be gone in that timeframe as
well.
Yale Evelev, Label President, Luaka Bop:
Yes, we see the writing on the wall and are getting into the greeting card business.
Evelev's response was so humorous we are posting answers to several other questions we asked him (we'll post insights from other labels in the near future):
DubMC: In terms of MP3 retailers, who is the frontrunner out of the gate specifically for world music sales? Why have they been successful so far?
Evelev: All the people not listening to those musical greeting cards seem to be going to iTunes, everyone else seems to be an also-ran so far.
DubMC: What are you doing differently now that the balance is shifting from physical product to digital content?
Evelev: See above or below.
DubMC: How would you describe the brand of your label in seven words or less?
Evelev: The foremost music and greeting cards label operating in NYC on the sixth floor on 19th Street anywhere.
DubMC: How closely do you work with booking agents? What are some things that agents do that help you out as a label?
Evelev: Very closely, because booking agents deal with people traveling and as we are planning our next business expansion, postcards, we know being friends with booking agents has built in advantages.
DubMC: What do you do to collaborate with concert presenters/venues/festivals? How will that change with the way that the music market is evolving?
Evelev: We will encourage festivals to have a greeting (and soon post) card kiosks.
DubMC: What is one thing you wish publicists would do differently or more often?
Evelev: Send out more greeting cards of course.
DubMC: "World music" as a term for a genre. Keep it or can it?
Evelev: I would think given the way the business is going, coming clean with the public and telling them we are now in the greeting card business and actually calling it that, would be the way to go.
DubMC: How would you like to be attributed for this article?
Evelev: Head of Greeting Cards and other new business.
DubMC.com is the brainchild of Dmitri Vietze and is sponsored by rock paper scissors, inc., world music publicity firm.
